Warren Buffett sought to buy Residential Capital from Ally Financial before bankruptcy

Article by Christian A., on May 21, 2012

Before Residential Capital entered bankruptcy, billionaire Warren Buffett had wanted to buy it from Ally Financial Inc., according to three sources. They said that Buffett had assigned former hedge-fund manager Ted Weschler to approach Ally to discuss their offer. The sources also said that Berkshire Hathaway, which is owned by Buffett, would have acquired the assets for almost nothing paid upfront.

However, he will get the possible liabilities like the increasing litigation costs as well as other claims. The people said that Buffett had hoped that ResCap would be able to avoid filing for bankruptcy since Berkshire had unsecured debt in the mortgage unit.

The sources said that the Weschler proposal was rejected by Ally, the former GMAC finance unit of General Motors, because it concluded that the company would be better protected from potential liabilities by filing for bankruptcy filing and a sale. In an interview, ResCap CEO Thomas Marano said that ResCap's board voted to declare bankruptcy.

In addition, they prepared to sell to Fortress Investment Group LLC and Nationstar Mortgage Holdings Inc. for about $2.3 billion. The people said that Fortress and Nationstar won't assume the liabilities that Berkshire had intended to get.

ResCap spokeswoman Susan Fitzpatrick said that the company is “confident” that the bankruptcy court-supervised bidding process would guarantee that the ResCap estate would get the best mix of price and terms for its assets in a deal that the court would approve of.

Topics: ally financial

If you liked the article, share on:

Comments

Recommended

British luxury automaker Aston Martin celebrates its new partnership with the Henley Royal Regatta sporting event by designing a one-off DB11 sports car that they recently revealed. The car explores...
by - June 28, 2017
The 2018 Dodge Challenger SRT Hellcat as we know, is the Demon's less powerful sibling, and there’s nothing wrong with that. But have you ever imagined how it would look...
by - June 28, 2017
Sorry Uber, but Handsome Cabs taxi company has something no one else can offer - a Lamborghini Huracan that can take their clients from Point A to Point B. This...
by - June 28, 2017
BMW saw a potential oil leak on the new M760Li, prompting them to recall the said vehicle last April. Today, a little over two months after issuing the first recall,...
by - June 28, 2017
Without a doubt, the SUV segment is getting increasingly more saturated. This month alone, we were greeted with city-oriented SUVs from the Kia Stonic to the Hyundai Kona, and now...
by - June 27, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries